Tonnage tax

Tonnage tax is an alternative corporate tax regime under which a shipowner’s tax bill is computed from the net tonnage of its qualifying fleet rather than from actual profit, giving a low and predictable charge. A notional daily profit is set per 100 net tons on a sliding scale, taxed at the normal corporate rate. The UK introduced it in 2000, and most EU states run schemes approved under the European Commission’s maritime state-aid guidelines, which require a flag and strategic-management link and training commitments. It lowered the tax cost of owning ships and helped retain fleets and management onshore.